Company Car - I can't make the numbers work!
Discussion
Apologies if this has been done to death, but I couldn't find anything relevant in the search facility.
Background is - wife & I share a car and I usually get train to work, and drive the car if I have to go to another office (3-4 times a month). Now our second child has arrived we are considering a second car to make things easier. A company car would make things very easy - drive a new car for 3 years, with tax, insurance and servicing all covered.
At work, I currently receive a car allowance and could opt for a company car if I wished.
However, looking at the potential "costs" of opting for the various company cars on offer, and "losing" my car allowance, I really cannot make my basic maths stack up in favour of a company car.
For example, going private, I would buy a passat sized car around 3-4 years old with savings - and pay for tax, insurance, servicing & tyres through the year from my cash allowance (which would total perhaps a third of the allowance). If I opted for a similar car (albeit brand new) via the CC scheme it would appear to cost me a lot in extra tax and personal contributions - even though car tax, insurance, servicing etc is covered. And of course I lose the cash allowance completely.
I guess there are people who this suits - those who like a new car and are prepared to pay a premium ordering one to their own spec, and if you cover 20k business miles a year, you won't want to be paying for wear and tear. But am I missing something here?
Background is - wife & I share a car and I usually get train to work, and drive the car if I have to go to another office (3-4 times a month). Now our second child has arrived we are considering a second car to make things easier. A company car would make things very easy - drive a new car for 3 years, with tax, insurance and servicing all covered.
At work, I currently receive a car allowance and could opt for a company car if I wished.
However, looking at the potential "costs" of opting for the various company cars on offer, and "losing" my car allowance, I really cannot make my basic maths stack up in favour of a company car.
For example, going private, I would buy a passat sized car around 3-4 years old with savings - and pay for tax, insurance, servicing & tyres through the year from my cash allowance (which would total perhaps a third of the allowance). If I opted for a similar car (albeit brand new) via the CC scheme it would appear to cost me a lot in extra tax and personal contributions - even though car tax, insurance, servicing etc is covered. And of course I lose the cash allowance completely.
I guess there are people who this suits - those who like a new car and are prepared to pay a premium ordering one to their own spec, and if you cover 20k business miles a year, you won't want to be paying for wear and tear. But am I missing something here?
It's different strokes. There's people like me at my place who would never ever come out of the company car scheme even if the only car I could order is a Fiat Panda, but then there's others who make the car allowance work very well and would never even consider opting back in.
I know this doesn't really help you, but if you're used to the money of the car allowance then stick with it.
Does your employer allow you to get a cheaper car on the scheme and get the rest of the money up to the allowance back per month? Thats what I do, I get £6k a year in allowance, and have a car that costs the company £375pm, therefore I get £125 a month that pays for the fuel/company car tax mostly.
I know this doesn't really help you, but if you're used to the money of the car allowance then stick with it.
Does your employer allow you to get a cheaper car on the scheme and get the rest of the money up to the allowance back per month? Thats what I do, I get £6k a year in allowance, and have a car that costs the company £375pm, therefore I get £125 a month that pays for the fuel/company car tax mostly.
Pretty much only works out if you're doing plenty of miles. And really should ought to compare a brand new car on a lease/PCP (as that's sort of what's happening with the CC).
When I had a CC years ago I compared getting a Golf GT Sport on CC scheme with all the tax associated with it to getting the same car on PCP type finance. It ended up with the CC costing a little more per month but I then didn't need to worry about servicing or unexpected costs.
I took the CC as it suited me at the time, the extra cost was worth it for the peace of mind in not having to worry about unexpected costs.
Personally... I'd not take the company car now and I'll take the cash allowance every time!
When I had a CC years ago I compared getting a Golf GT Sport on CC scheme with all the tax associated with it to getting the same car on PCP type finance. It ended up with the CC costing a little more per month but I then didn't need to worry about servicing or unexpected costs.
I took the CC as it suited me at the time, the extra cost was worth it for the peace of mind in not having to worry about unexpected costs.
Personally... I'd not take the company car now and I'll take the cash allowance every time!
A couple of considerations.
In my experience cash alternatives tend not to keep up with inflation. Companies can peg the value or increase it as they see fit, leaving you worse off as you still have to pay ever increasing bills. With a CC they have to pay whatever it costs.
If you have CC and lose your job you lose your car. OK you keep it for your notice period but at the time when you are most likely to need a motor you might not have one and it's just another pain to try and sort out a car while you are also trying to sort out a new job.
In my experience cash alternatives tend not to keep up with inflation. Companies can peg the value or increase it as they see fit, leaving you worse off as you still have to pay ever increasing bills. With a CC they have to pay whatever it costs.
If you have CC and lose your job you lose your car. OK you keep it for your notice period but at the time when you are most likely to need a motor you might not have one and it's just another pain to try and sort out a car while you are also trying to sort out a new job.
Couple of things.....
People do not compare "apples with apples" i.e new company car versus pre-owned car.
Private mileage i.e is it paid/funded (and thus taxed) OR no fuel card from employer and you have a mileage allowance that you claim back.
With the recent increase in fuel/insurance/repairs on modern electrics/cost of "a set of boots"/etc I have opted back in (first time in over a decade).
People do not compare "apples with apples" i.e new company car versus pre-owned car.
Private mileage i.e is it paid/funded (and thus taxed) OR no fuel card from employer and you have a mileage allowance that you claim back.
With the recent increase in fuel/insurance/repairs on modern electrics/cost of "a set of boots"/etc I have opted back in (first time in over a decade).
T5R+ said:
Couple of things.....
People do not compare "apples with apples" i.e new company car versus pre-owned car.
Private mileage i.e is it paid/funded (and thus taxed) OR no fuel card from employer and you have a mileage allowance that you claim back.
With the recent increase in fuel/insurance/repairs on modern electrics/cost of "a set of boots"/etc I have opted back in (first time in over a decade).
This makes sense, i opted out 9 years ago and the car allowance has stayed the same and isn't going up anytime soon.People do not compare "apples with apples" i.e new company car versus pre-owned car.
Private mileage i.e is it paid/funded (and thus taxed) OR no fuel card from employer and you have a mileage allowance that you claim back.
With the recent increase in fuel/insurance/repairs on modern electrics/cost of "a set of boots"/etc I have opted back in (first time in over a decade).
If you are doing 10K+ business miles a year a Co. car is probably the better option at the moment.
I opted out 2 years ago and have never looked back.
Initially, I bought a 3yr old Merc C320cdi and ran it for 2 years and 40k miles.
Reckon it cost me about £400/month for depreciation and running costs (exc fuel)
By way of comparison, a leased C320cdi (albeit new) would have cost me £750/month
Initially, I bought a 3yr old Merc C320cdi and ran it for 2 years and 40k miles.
Reckon it cost me about £400/month for depreciation and running costs (exc fuel)
By way of comparison, a leased C320cdi (albeit new) would have cost me £750/month
alfaspiderman2 said:
I opted out 2 years ago and have never looked back.
Initially, I bought a 3yr old Merc C320cdi and ran it for 2 years and 40k miles.
Reckon it cost me about £400/month for depreciation and running costs (exc fuel)
By way of comparison, a leased C320cdi (albeit new) would have cost me £750/month
Actually, I've just recalculated, and it was only £343/month - see belowInitially, I bought a 3yr old Merc C320cdi and ran it for 2 years and 40k miles.
Reckon it cost me about £400/month for depreciation and running costs (exc fuel)
By way of comparison, a leased C320cdi (albeit new) would have cost me £750/month
Purchase (07/09)16350
Value (07/11) 7500
Depreciation 8850
Tax 500
Insurance 800
Warranty 600
Rear Brakes 90
Swirl Flaps etc 400
Service 600
Total Costs 11840
Tax Rebate 3600
Net Costs 8240
Net Costs (Month over 24 months) 343
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